INDIAN FIRMS TO RAISE $48 BN VIA INFRASTRUCTURE ASSETS, REAL ESTATE, SAYS ICRA

Indian companies will probably raise more than ₹3.5 lakh crore ($48 billion) through infrastructure and real estate investment trusts in the coming year, compared with $29 billion raised to date, ICRA estimates.

The lure of the hybrid instruments, which were in the making for a decade, has been boosted by recent rule changes, according to the local unit of Moody’s Investors Service. ICRA predicts about ₹1 lakh crore of commercial real estate assets and ₹2.5 lakh crore of infrastructure assets including highways, power transmission, gas pipelines, renewable and digital fiber assets can be monetised.

“The supporting regulatory framework for various stakeholders attracted both debt and equity investors towards these trusts,” Shubham Jain, senior vice president for corporate ratings at ICRA, said in a report published Thursday. “Lenders are also increasingly becoming comfortable lending to such structures.”

Finance minister Nirmala Sitharaman had proposed some of the measures in the budget presented earlier this year, as her government looks to bridge a budget shortfall that’s widening due to the coronavirus pandemic. In May, Power Grid Corporation of India Ltd monetized five transmission assets via the public issue of its infrastructure trust.